Thames Valley Berkshire LEP commits £7.25m to funding for start-ups and growing businesses
Local council-business partnership uses government funding to finance Escalator Fund
Thames Valley Berkshire Local Enterprise Partnership (TVB LEP) has launched a £7.25m Escalator Fund, designed to offer repayable loans to start-ups and growing businesses.
Set to go live on February 1, the Escalator Fund will be divided into three schemes to support businesses at various stages of development.
- The TVB Commercialisation Fund, designed to support newly established companies has been allocated £1.75m
- £4m has been set aside to support ambitious growing businesses through the TVB Expansion Fund
- And £1.5m is set to go towards the TVB Growth Fund, aimed at accelerating early-stage companies with high growth potential. These funds will be released when matched by private investment.
The amount of support available for businesses depends on the fund from which it comes. Start-ups can benefit from loans between £25,000 and £300,000 at fixed rates of at least 12% for up to four years from the TVB Commercialisation Fund. The TVB Expansion fund offers more mature companies loans between £50,000 and £200,000 at rates of between 6% and 10%, but typically around 7%.
For more ambitious start-ups, the TVB Growth Fund provides funding in the form of equity investment, offering between £100,000 and £300,000 in return for a minority stake in the company.
Established by government in June 2010, LEPs are designed to form a partnership between local councils and local businesses across 39 UK regions, to help boost business and entrepreneurship in each area. Thames Valley Berkshire’s LEP has used money from the £500m Growing Places Fund designated to LEPs in November 2011 to support the Escalator Fund.
Having been allocated £15m from the Growing Places Fund, TVB LEP previously used £10.28m to fund other business-boosting schemes including the Superfast Berkshire broadband initiative and the Western Rail Access to Heathrow project.
The Escalator Fund, which is set to be authorised and regulated by not-for-profit community interest company the FSE Group, will only provide loans to ambitious companies that are deemed to have the potential to boost the local economy and employment opportunities, however they are not sector-specific.
Steve Lamb, chairman of TVB LEP commented: “The Escalator Fund is our response to the feedback from business across Thames Valley Berkshire during many months of consultation across the sub region.
“It is designed to provide finance to a range of businesses from start-ups to the more established, looking for funding which is difficult to obtain from more traditional sources.”
Kevan Jones, CEO of the FSE Group explained to Startups: “The funds are priced commercially to work towards making the long term availability sustainable. In effect, those that are successful will pay for those that aren’t.”
“The FSE Group has managed similar funds over a number of years and is pleased to be able to work with the TV LEP to deliver these new funds to potential high growth SMEs in Berkshire.”